The Home Buyer’s Guide: Ten Steps Towards Home OwnershipJanuary 30, 2012
The new year is here, and your top resolution is to buy a real estate property. Home ownership can be a wonderful experience and I love matching up a home with a buyer. It’s quite rewarding when we walk through a property and I get to see your face light up with the possibilities. But before we get to that gleeful moment, there are some important steps to conduct first. Here are some helpful tips for to you get started with the home buying process.
1) What can you afford? Unless you’re paying cash, this is a question you’ll need an expert to assist answering. A good mortgage lender is one of the tools I utilize most when helping home buyers. They will review your financial situation and give you the best options available to you. There are several factors involved in financing, not just income, so having someone go through your financial options is the key to starting right. Your lender will provide you with a pre-approval letter which will come in handy later. Consider the down payment you’ll need with financing today:
a) When purchasing a condo, a lender may require 20% to 30% down, with a few options now available with 3.5% to 10% down.
b) When purchasing a single family home or duplex, your financing options range from 3.5% to 20% down.
2) Would you like a house or condo? Now that you know what you can afford, it’s time to decide whether you’re an urban dweller, or a homebody. There’s no right or wrong choice, it’s just what you like best.
a) House – you can have your white picket fence, the backyard deck for BBQ’s, and, of course, a house full of whatever pets you desire. Plant yourself a butterfly garden or hang a swing under the avocado tree. You get to set your own house rules. You’re also responsible for your own utility bills and unless you want to do it yourself, you’re going to have a landscaper.
b) Condo –You are centrally located and walking distance to shops & restaurants, enjoying amenities provided, and having someone else maintain them. You only need to concern yourself with the interior space of your condo, and abide by the condo rules & regulations. For the social butterfly that prefers to have minimal time spent around their residence, a condo may be ideal. Just remember, if you decide you want a pet, limit your choices to one dog or cat, 20 lbs max. Many condos do not allow pets, and those that do have strict rules on number of pets and weight.
3) Call Urban Resource and give us your wish list. Now the fun begins! We’ll take notes, make some suggestions, and get started with your search. We take a funneling approach, from neighborhoods to layout. Make sure you spend some time getting to know neighborhoods of interest. See what your morning or evening commute would feel like and check out the local coffee shop. We can give you a lot of information, but it really comes down to how you like the neighborhood. You’re going to see a lot of properties in the process; taking notes of what you like and don’t like about a particular home will really help in the home finding process.
4) Let’s make an offer. We’ve walked through your top choice – Excellent! We place an offer in writing that features price and terms. We will include the mortgage pre-approval you received earlier, which plays an important role in the negotiation, and signifies to the seller you’re a serious contender that’s committed to the purchase. Once there’s a mutual agreement in writing, we’re in escrow!
5) Get a home inspection. Whether you’re buying a house or condo, a good home inspector will go through all of your appliances, electrical, plumbing, roof & crawl space. If you can, be present during your home inspection. You’ll have some time to go through your home, take measurements, and go through any items noted for repair with the inspector.
6) Work closely with your mortgage lender. Although you’re already pre-approved, your lender may need further items in order to provide a final loan commitment. This will include items from employment verification letter to the last pay stubs. It’s important to provide any information requested on a timely basis. Our goal is to obtain a loan commitment without conditions within 30 days.
7) Choose your Closing agent. The closing agent is responsible for conducting all title & lien searches, and insures that the property is transferred correctly from seller to buyer. If you’re buying a condo, they confirm what’s owed to the condo association, and that any balances due are paid up at closing. We have excellent real estate attorneys that we can recommend that will assist in this process.
8) Conduct a Walk-Thru. Once we confirm we’re ready to close, we schedule a final walk thru. This just insures that the property is vacant and is in the same condition it was during the inspection. In Miami, most sales include all appliances and fixtures, including window treatments, but the sales agreement will detail what stays & what goes.
9) The Closing. Now you’re ready for the big day! We’ve reviewed the settlement statement (HUD1) which provides a detail of all charges, and what is being paid. Any outstanding debts or payments are noted in the HUD1, which can include any unpaid maintenance fees, municipal liens and the cost of recording documents with the county. Since taxes & maintenance may be paid at the beginning or end of the year, each party receives a credit or debit for amounts due. Once you confirm the balance of the funds due for closing, you can send a wire transfer to the closing agent or bring a cashier’s check with you to the closing table. If you’re financing, the closing agent will have a mortgage package that details the terms of your loan for review and signature.
10) Celebration Time! You’ve just finished the process with the closing agent and you’ve been handed the keys. Congratulations –You are now a proud homeowner! Let’s celebrate!
Urban Resource can help you find the perfect home! We focus our real estate business in the wonderful neighborhoods surrounding Biscayne Bay in what we lovingly refer to as Metropolitan Miami, like Surfside, Bal Harbour, Bay Harbor Islands, North Bay Village, Miami Shores, Biscayne Park, El Portal, Morningside, Belle Meade, Bayside, Buena Vista, Midtown, Brickell, Downtown Miami, The Roads, Shenandoah, Silver Bluff, and Coconut Grove, with a specialty in Miami Beach from South Beach to North Beach. We’d love to share the distinctive characters that make each neighborhood special. Give us a call, and let’s get started!